The test case is a much simplified config hopefully sufficient to demonstrate the problem.
Please note that the intended configuration is to show scrollbar only at the "center" region level when content doesn't fit into the browser window.

*EDIT BY SLEMMON
tested ok in 4.1.3
I see the issue in 4.2 and 4.2.1.818

This seems to have the scroll behavior you are after. With the extra container you need to configure it because it seems to be following "natural" size and sizing to its parent container while the children overflow that container and are clipped.

Thanks for the reply. This example is overly simplified, and some content was removed to reduce the code size. In our real app, some pages do have multiple level of nested containers and more content. We probably won't be able to change all the pages to have only one level of container.

Regarding "With the extra container you need to configure it", how would we configure this extra container? In this example, the Center panel has xtype of "tablecontainer" which has defaultType of 'tablecontainer', therefore all descendant containers under Center panel would have the same xtype and Table layout configured. Do we need to do additional configuration for the nested container to behave correctly?

We use Table layout for all level of containers under Center panel, because we have requirements: (1) do not cut off content with scrollbar, (2) do not show nested scrollbars and only scroll at Center panel level. We are open for suggestions if there are better ways to achieve this.

Some more information:

We have upgraded to ExtJs4.2.1, therefore we won't need a patch to 4.2.0. However we still need a proper fix for the latest version.

We also opened a support ticket (12121) to facilitate the discussion.

We have provided remote access to our real app to Sencha service, because fully reproducing the layout issues in standalone examples is very difficult and time-consuming.

In our latest app (based on ExtJs4.2.1), the rendering problems (panel overlapping and missing scrollbar) appear to mainly happen with Chrome, but not other browsers. I'm attaching the screenshots.